|
The Civitan International Legacy Society is a new Foundation program that recognizes all Civitans who make planned gifts to the Foundation. Planned gifts are charitable contributions that are structured to provide benefits to the donor and the donor's family, as well as to the Civitan International Foundation. A planned giving donor may be able to increase his or her retirement income, reduce or eliminate gift, estate and capital gains taxes, as well as increase returns from low-yielding assets through the use of a well structured planned gift to the Foundation.
In recognition of a planned gift, a donor becomes a member of the Legacy Society for life. He or he also receives a distinctive lapel pin, recognition at the Civitan International World Headquarters in Birmingham, Alabama and an invitation as a guest of honor to the President's Council reception held at International Conventions. (The Civitan Legacy Society can also be discreet and will respect the wishes of those planned giving donors who desire anonymity concerning their planned gifts to the Foundation.) Those who have already made planned gifts will automatically become members of the Legacy Society, as well as remaining Life Members of the President's Council.
Although there are several different planned giving options currently available to a Legacy Society donor, the following is a brief discussion of charitable remainder trusts.
A charitable remainder trust provides a way to make a gift to an irrevocable trust, and to receive a stream of income for the Legacy Society donor or others, for a lifetime or a period of time up to 20 years. The donor may designate payments as a percentage of the initial value of the principal (a charitable remainder annuity trust) or as a percentage of the yearly value of the principal (a charitable remainder unitrust). At the end of the trust term, the assets are distributed to the Civitan International Foundation. Through a charitable remainder trust, a Legacy Society donor can:
Increase income from low-yielding assets;
Avoid or reduce income, estate and gift taxes;
Allow assets to grow tax-free;
Provide income for the donor's family or loved ones.
Example:
Mr. Black has made maximum contributions to his retirement plans but still wants to increase his postretirement income stream. He owns securities that he bought 20 years ago for $ 20,000. The securities are now worth $ 200,000 and pay Mr. Black approximately 3% or $ 6,000 in dividends each year. If Mr. Black sells the securities, he will pay capital gains taxes on $ 180,000. If Mr. Black places the securities in a charitable remainder annuity trust and requests a yield of 7% of the original principal amount, he will:
Avoid capital gains taxes on $ 180, 000;
Increase his yearly income from $ 6,000 to $ 14,000, and
Receive a charitable income tax deduction.
At the end of the trust term, the remainder of the assets will pass on to the Civitan International Foundation to continue to support the cause of eliminating mental and developmental disabilities. As an alternative, Mr. Black may choose a charitable remainder unitrust, which allows his income payments to fluctuate as a percentage of the yearly value of the trust.
Charitable remainder trusts are not taxed on income or capital gains and represent an excellent gift vehicle for gifts of appreciated property, such as appreciated securities, real estate and closely held business stock. Income payments to beneficiaries are taxed, however, depending on the character of the income distributed.
Civitan International can explain in more detail, the different gift planning options available through the Civitan International Foundation and can prepare proposals for review by your professional advisor. For more information concerning the Civitan International Legacy Society and the different planned gifts accepted by the Foundation, please contact Keith Sheffield, Director of Planned Giving, (205) 591 - 8910, extension 105; Email: sheff@civitan.org
The example in this article is not intended as legal or financial advice. Consultation with an attorney and/or financial advisor is recommended.
|
|
